Interested buyers heard that the Common School Fund lands within the Elliott State Forest — approximately 82,500 acres — are valued at $220.8 million.
About 50 people gathered recently at the Department of State Lands to hear the results of a review process that involved analyzing appraisals provided by three independent firms. Mason, Bruce & Girard, an Oregon natural resource consulting firm, prepared the final report and valuation.
The announcement is a key piece of information for the public, private, and nonprofit entities that have expressed an interest in acquiring the Elliott property in Coos and Douglas counties. Interested buyers have until November 15, 2016, to submit plans to acquire the acreage. For plans to be deemed “responsive” they must:
– Demonstrate how the purchaser will pay the fair market value of the forest
– Be for the entire school land acreage
– Show how certain public values will be preserved, including:
1) Ensuring public recreational access on at least half of the forest
2) Protecting older forest stands on at least 25 percent of the forest
3) Conserving high quality watersheds through the protection of riparian areas along streams containing salmon, steelhead and bull trout
4) Providing at least 40 direct or indirect full-time jobs annually for at least 10 years
“Today’s announcement comes after years of dedicated work on how to solve the dilemma of the Elliott State Forest — a dilemma created by the forest consistently losing money for its owners, the schoolchildren of Oregon,” said Department of State Lands Director Jim Paul.
“We’ve conducted a very rigorous process over the past two years that included outreach with a wide variety of interest groups and detailed technical analyses. Our goal has always been to strike the right approach towards ensuring the Common School Fund is fully compensated, while also protecting a range of natural resources important to the public,” he said.
The Elliott State Forest is made up primarily of lands owned by Oregon’s Common School Fund, an endowment that generates distributions from the fund’s earnings to Oregon’s 197 public school districts twice a year. These 82,500 acres are a portion of the school lands given to the state by the federal government at statehood with the express legal condition they be used primarily to produce revenue for K-12 schools. Oregon’s constitution confirms the State Land Board’s fiduciary responsibility to act as trustees of the fund and to meet the requirement of providing revenue for schools.
Before 2013, the Elliott generated millions of dollars from harvesting about one percent of the forest each year. Since 2013, because of harvest limitations prompted by a lawsuit over federal protected species and the ongoing costs of maintaining the land in compliance with state and federal laws, owning the Elliott has meant a net loss to the Common School Fund of more than $4 million.
Current estimates predict that the forest will continue to require more money to manage than it produces in revenue for the fund. In order to protect the financial health of the fund, while still acting within their limited capacity to consider other public benefits, the Land Board is providing an opportunity for public, private and nonprofit entities to come up with acquisition plans to purchase the property in a way that will benefit the fund and provide enhanced public benefits.
Under the process set up by the Land Board, the proceeds of the sale will be invested in the Common School Fund, generating a more secure stream of funding for schools.
The next steps in the Elliott ownership transfer are to continue to provide information and answer questions for interested parties (August through October); review plans submitted by Nov. 15 (November and early December); and to work with the State Land Board to select and make an offer to the preferred buyer (December).
“Protecting and enhancing the Common School Fund is perhaps the most important thing we do as an agency, and a successful transfer of ownership of the Elliott State Forest as a result of this work will be a huge achievement towards this end,” says Jim Paul.
Additional information on the appraisal process:
Three appraisal firms were selected through a Request for Proposal process conducted by the Department of State Lands in the fall of 2015. They included Ted Foster & Associates, The Healy Company, LP and James W. Sewall Company. Their completed appraisals ranged from $192 million to $262 million.
The Appraisal Review Report was prepared by Mason, Bruce & Girard, a Portland-based consulting firm established in 1921. Roger G. Lord, a state-certified General Real Property Appraiser, conducted the review and established the fair market value of $220.8 million after analyzing and reconciling the three appraisals.
The report was prepared to meet standards specified in the Uniform Appraisal Standards for Federal Land Acquisition (UASFLA) and the Uniform Standards of Professional Appraisal Practice. UASFLA standards require that the property be appraised for its highest and best economic use.
The State Land Board consists of Governor Kate Brown, Secretary of State Jeanne P. Atkins and State Treasurer Ted Wheeler. The Department of State Lands administers diverse natural and fiscal resources. Many of the resources generate revenue for the Common School Fund, such as state-owned rangelands and timberlands, waterway leases, estates for which no will or heirs exist, and unclaimed property. Twice a year, the agency distributes fund investment earnings to support K-12 public schools. The agency also administers Oregon’s Removal-Fill Law, which requires people removing or filling certain amounts of material in waters of the state to obtain a permit.
Jim Paul — 503-986-5224; email@example.com
Julie Curtis — 503-986-5298; firstname.lastname@example.org